The Nifty IT index surged by 1%, reaching a fresh all-time high in today's trade, as central banks, where Indian IT companies have significant revenue exposure, began cutting interest rates due to moderating inflation.
The index opened today with a gap-up at 43,244 points, compared to its previous close of 43,152 points, and continued its upward momentum to hit a new record high of 43,571. This marks the second consecutive day of gains for the index.
All 10 components of the index are trading in positive territory, with Wipro leading the pack, rallying 4.2% to ₹552 per share. Other notable performers include MphasiS, up 2%, Coforge, up 1.9%, L&T Technology Services, up 1.5%, and Persistent Systems, up 1.4%. Tech Mahindra, LTIMindtree, HCL Technologies, TCS, and Infosys also posted gains, ranging from 0.3% to 0.8%.
Significantly, five stocks, including MphasiS, Coforge, Persistent Systems, HCL Technologies, and LTIMindtree, have reached new 52-week highs during the session. This rally has pushed the Nifty IT index to a 22.31% year-to-date gain, surpassing the Nifty 50's increase of 16%.
The European Central Bank (ECB) on Thursday cut rates by 25 basis points, as anticipated. The ECB's decision reflects growing confidence among policymakers that inflation is easing. This marks the ECB's second rate cut, following the one in June.
Sumeet Bagadia, Executive Director at Choice Broking, said, “The Nifty IT index is looking bullish on the technical chart. The index has a strong base of 43,100, and this support is expected to remain sacrosanct. So, investors should see any dip in the index as a buying opportunity. The index is expected to touch the 44,000 mark in the near term.”
"Wipro shares are looking strong on the technical chart, and they may touch ₹575 to ₹580 apiece soon. So, Wipro shareholders can hold their position in the Indian IT sector significantly, maintaining a stop loss at the ₹535 apiece mark," he added.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
